Lafarge Zimbabwe reports drop in revenue in 1H14

Lafarge Zimbabwe has reported its financial results for the first half to 30 June 2014. Revenue reached US$28.2 million, down from US$32.2 million at the end of June 2013. The Chairman’s Statement blames the difficult operating environment, ‘characterised by the prevailing liquidity crunch’. It also notes that the government has revised the GDP projections downwards from 6.1% to 3.1%.

Cement sales volumes were 12% lower than the year earlier due to low demand in traditional markets. Revenue therefore fell by 12.5% and gross profit reached US$9.4 million, down from US$14.1 million in the first half of 2013. However, this includes maintenance costs for the kiln shutdown, which was completed successfully and puts the company in a better position for the second half of the year.

As well as maintenance and spare parts, the company also invested US$4.4 million in development of its limestone quarry. The company is well positioned to take advantage of a traditionally stronger second half and believes the construction industry looks more positive as the government tackles the mounting housing backlog.

Cement and minerals included among Zimbabwe’s principal exports to the Southern African Development Community, which increased by 113% from 2009 to 2013 overall; Nigeria sets up minerals and metal centre to facilitate investment.